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Projected growth rate for rapidly growing

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The projected growth rate for a rapidly growing German company is 10% for the next two years and 7% for the two years following that. At the end of 4 years, the growth rate will expectantly settle at 4% and remain so for the foreseeable future. The company expects to pay its first dividend of €2.5 per share two years from now. Assume that the investors' required rate of return for the company's shares is 20%. Determine the value of this company's share. Is the share a desirable purchase if its market price is £14 per share?

Reference no: EM133306377

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